Cabinet restores Kariba’s US$700m power tender

CABINET on Tuesday reversed a decision by the State Procurement Board (SPB) to cancel the tender for Kariba South’s US$700 million expansion programme which had been awarded to Chinese firm Sino-Hydro.

Report by Staff Writer

Sino-Hydro was the sole bidder for the project, but had failed to win the tender after disagreements with the SPB over a site visit certificate and bid bond which is issued as part of a bidding process by the surety to the project owner, to guarantee that the winning bidder would honour the contract under the terms on which it bid.

Sources said the Chinese firm’s bid was restored after stormy debates in Cabinet on Tuesday.

Before cabinet overruled the SPB’s decision to cancel the Sino-Hydro tender, Energy and Power Development minister Elton Mangoma had complained of the cancellation saying it was unfortunate that flimsy reasons were being given as the basis for cancellation of such an important national project.

Once fully operational, the Kariba South plant is expected to provide an additional 300 megawatts to the national grid by 2016, and commission a massive 800MW at the Batoka Gorge four years later if funding is secured.

Zimbabwe is only capable of generating about 1 200MW of the peak national demand of about 2 2000MW, and government’s decision to restore the deal is part of its efforts to curb a crippling power shortage that has stalked the country, particularly in the past five years.

The country’s industrial capacity utilisation stands at an official 60%, raising fears the power deficit would worsen should capacity utilisation improve.

Zimbabwe Energy Regulatory Authority chairperson Canada Malunga last month said the new energy policy acknowledged the role of renewable energy sources and the power regulator was working on an Independent Power Producers policy framework.

The regulator has licensed various large electricity generation projects, investing in 11 new projects with a combined capacity of about 5 400MW valued at US$10 billion.

Zimbabwe’s power shortage has resulted in numerous outages for domestic and business consumers, affecting government projects aimed at helping boost economic revival.

Zimbabwe plans to raise power output to 10 000 megawatts in line with the National Energy Policy.